Short-term rentals (STRs) contributed €19 billion to the European Union’s GDP in 2023 and supported over 300,000 jobs across Europe, according to a new Oxford Economics report commissioned by Airbnb.
For Airbnb, this report serves a clear purpose: it’s a tool to advocate for the economic benefits of STRs, particularly in the face of increasing scrutiny and regulatory challenges across Europe. The question is, how useful is this report for professional STR managers?
Europe’s Short-Term Rental Advantage: Economic Impact, Key Cities, and the Need for Balanced Regulations
The Harnessing the Short-Term Rental Advantage in Europe report by Oxford Economics highlights the economic impact and benefits of short-term rentals (STRs) across key European destinations.
The report asserts that short-term rentals are instrumental in spreading tourism to less-visited locations, revitalizing rural economies, and providing temporary capacity for major events like the Paris Olympics and Eurovision. It emphasizes balanced regulations, cautioning that overly restrictive policies could stifle these benefits and drive activity into informal markets.
Countries included: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
The Bigger Picture: Why This Report Matters
The Oxford Economics study is a meticulously crafted document, but its purpose is far from neutral. Commissioned by Airbnb, it’s designed to emphasize the economic benefits of STRs in the face of mounting pressure from EU policymakers. With the exclusion of key markets like the UK, the report zeroes in on EU member states—an intentional focus aimed at influencing discussions at the European Commission level.
For professional STR managers, this report offers more than a defense of the industry—it’s a playbook for advocacy and adaptation in a rapidly evolving regulatory environment.
How STR Managers Can Use Insights from the Report to Advocate for Fairer Regulations
The Oxford Economics report offers STR managers the data they need to demonstrate the real impact of short-term rentals and push back against regulations that don’t always deliver their intended outcomes. Here’s how managers can leverage these insights:
1. Demonstrate the Real Economic Impact of STRs
The report provides concrete evidence of how STRs uplift rural economies, support cultural tourism, and decentralize tourism spending. Use these examples to showcase STRs’ positive contributions to local communities and counter arguments that STRs solely exacerbate housing issues:
- France: STRs contributed €36.6 billion to the country’s GDP, with guests often staying in smaller towns that lack traditional accommodation options.
- Portugal: STRs supported over 200,000 guest nights in the Douro region in 2023—one of Portugal’s least developed areas, where incomes are 26% below the national average. STRs here are an economic lifeline, boosting rural economies without competing for urban housing stock.
- Ireland: In counties like Kerry and Cork, STRs generated €107 million in tourism spending. Importantly, 71% of Airbnb activity occurred in rural areas, redirecting visitors away from housing-constrained Dublin.
- Croatia: 52% of STR guest nights in Croatia occur in rural areas, driving heritage tourism along routes like the Istrian Wine Road and supporting events like Ultra Europe in Split, which attracted 160,000 attendees.
- Germany: Only 30% of STR guests stay in major cities, while 70% choose smaller towns and rural areas. This decentralization reduces overtourism in hotspots and distributes tourism revenue more equitably.
- Spain: STRs near Protected Designation of Origin (PDO) olive oil regions generated €120 million for local commerce in 2023, proving STRs’ role in sustaining niche industries and rural economies.
These examples demonstrate that STRs don’t just host tourists—they create economic opportunities, preserve heritage, and address regional tourism imbalances.
2. Push Back Against Regulations That Miss the Mark
The report highlights that overly restrictive policies often fail to achieve their intended goals, such as easing housing pressures or curbing overtourism. Instead, they shift STR activity to the informal sector, complicating oversight and missing opportunities for balanced growth. Use these case studies to advocate for smarter, evidence-based regulation:
- Amsterdam: Regulations led to a 52% drop in STR guest nights, but overall tourism grew by 12% from 2019 to 2023 as visitors shifted to hotels. This demonstrates that targeting STRs alone doesn’t reduce tourism pressures—it simply shifts the demand elsewhere.
- Rotterdam: A more moderate approach—limiting STRs to 60 days annually without heavy restrictions—resulted in 21% tourism growth between 2019 and 2023. Balanced regulations can coexist with tourism growth and economic benefits.
- Barcelona: Harsh measures, such as registration bans and fines up to €600,000 (28 times average host earnings), have pushed STRs into the informal sector, making oversight harder and reducing transparency.
These examples underscore the need for proportional regulations that address housing and tourism concerns without stifling economic contributions or pushing STRs underground.
The Gaps in the Narrative
Let’s be real—Airbnb likely commissioned this report with an expected outcome in mind. But that’s not inherently bad; it sets the stage for a deeper dive into what the numbers mean and what they might leave unsaid. While the report champions STRs as economic drivers, it’s essential to dig deeper. What’s omitted or understated?
1. Housing Concerns in Tourist Hotspots
The report challenges the perception that STRs significantly inflate housing costs. If all STR listings were returned to the long-term housing market, house prices would drop by just 0.05% to 0.7%, depending on the city:
- Lisbon: A modest 0.7% decrease.
- Paris and Madrid: About 0.3% each.
The above is true in a macro sense, given STRs’ small share of total housing stock, but it overlooks how housing pressures are felt most acutely in tourist-heavy areas, like Lisbon’s Alfama or Barcelona’s Gothic Quarter. Professional managers can’t solve the housing crisis, but they can be part of the solution by adhering to local regulations, diversifying portfolios, and prioritizing underdeveloped regions
2. Public Perception and Balancing Narratives
Even if STRs aren’t the primary driver of housing prices (as the report suggests), the perception that they are persists. Managers need to proactively address these concerns with transparent practices, such as prioritizing compliance with local laws and emphasizing your role in creating sustainable tourism experiences.
3. Investor Activity and Speculation
The report sidesteps the fact that while STRs aren’t the sole driver of buy-to-let investor activity, the profitability of platforms like Airbnb undoubtedly attracts speculators. This can exacerbate housing pressures and create friction with local communities. Responsible managers can help shift the narrative by emphasizing professionalism and long-term sustainability over short-term profits.
4. Sustainability and Saturation
While the report highlights how STRs disperse tourism to rural areas, it also raises sustainability challenges. For example, in regions like rural Portugal and Croatia, surging demand hasn’t always been matched by infrastructure growth. Managers have an opportunity to lead here—balancing expansion with sustainable practices to ensure these regions thrive without becoming oversaturated.
What’s Next for the Industry?
The Oxford Economics report underscores the resilience and importance of STRs in Europe’s tourism economy. However, it also signals where the industry is heading:
- Regulation Is Inevitable: As STRs grow, so will scrutiny. Managers need to stay ahead of compliance requirements and advocate for fair rules that balance economic benefits with community concerns.
- Professionalization Will Accelerate: The days of informal hosting are fading. Professional managers who adopt high standards, leverage technology, and engage with sustainability will have a competitive edge.
- The Sustainability Imperative: From eco-conscious travelers to government policies, sustainability is no longer optional. It’s time to integrate this into your business model if you haven’t already.
Final Thoughts: The Numbers Are Just the Start
The Oxford Economics report offers professional STR managers valuable ammunition to advocate for their businesses while highlighting areas where adaptation is crucial. As regulation tightens and public scrutiny grows, the industry’s future depends on balancing economic benefits with community trust.
This report isn’t just a defense of STRs—it’s a call to action. Managers must go beyond the numbers, adopting transparent practices, advocating for fair policies, and leading with sustainability to ensure the long-term viability of short-term rentals.
